No Surprise Here!
New U.S. claims for unemployment benefits unexpectedly climbed to a nine-month high last week, yet another setback to the frail economic recovery.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended August 14, the highest since mid-November, the Labor Department said on Thursday.
Analysts polled by Reuters had forecast claims slipping to 476,000 from the previously reported 484,000 the prior week, which was revised up to 488,000 in Thursday’s report.
Sorry but this should not have been “unexpected”. The Democrats won’t do what needs to be done – neither will the Republicans. What needs to be done you ask? A major overhaul of our trade policy. During the Reagan presidency US firms started shifting their manufacturing jobs overseas to improve the bottom line. It really picked up steam during the Clinton administration. This was never sustainable. People who don’t have a job cannot be customers. People with a low paying service job are really bad customers. At some point we were going to reach the point where there were not enough people who could afford to purchase the low quality and often dangerous products “US” companies were making in China. Before the 2004 election Alan Greenspan and the FED managed to postpone the inevitable by flooding the economy with cheap easy credit. We all know by now how that worked out and that is what Obama inherited. Unfortunately Obama chose to listen to the same Clinton advisers who got us into the mess to begin with and nothing was done to address the real problem.
An economy based on the financial shenanigans of the Wall Street casino is not an economy – a real economy makes things. We don’t make anything in the US anymore. Following WWII the US was an economic powerhouse and it’s no coincidence that we had a thriving middle class. A population that makes a good living wage is a population of good customers. The days of a credit based economy are over and there will be no improvement in the economy without major changes in trade policy.
At some point the teabaggers will figure out that their real enemy is not the black man in the White House but their Oligarchic sponsors – Dick Armey and the Koch brothers.
Cross posted at Newshoggers